It seems like a day does not go by that my jaw does not drop with the absurd disgusting things our FED does for the sole benefit of supporting stock prices.
So who benefits from the FED buying junk bonds in the open market? I dont think it helps me personally unless I own a bond fund. I know it does not encourage corporations to hire more workers or invest in capital goods given the extremely low rates that bonds already have.
I guess Japan has marked our path and I can for sure see that it has worked for them so it will work for us.
Next stop, buying the QQQ ETF the next time the market drops 5%.
What a joke.
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It seems like a day does not go by that my jaw does not drop with the absurd disgusting things our FED does for the sole benefit of supporting stock prices.
So who benefits from the FED buying junk bonds in the open market? I dont think it helps me personally unless I own a bond fund. I know it does not encourage corporations to hire more workers or invest in capital goods given the extremely low rates that bonds already have.
I guess Japan has marked our path and I can for sure see that it has worked for them so it will work for us.
Next stop, buying the QQQ ETF the next time the market drops 5%.
Unless they see something much worse materializing in the economy, the move by the FED to now purchase individual corporate bonds is a bit puzzling. It had already achieved its objective back in mid-March to lower corporate borrowing rates by buying bond ETFs , back when there was no liquidity and credit markets weren't functioning properly. But my understanding is companies have been able to borrow at almost pre-crisis levels again, so the move seems a bit puzzling. Also, I read that the junk bonds that the FED is purchasing had been investment grade before the crisis, but had been downgraded thereafter..
Let's hope that the market purchases stays on the debt side of things, and doesn't "escalate" to the equity side. Buying the QQQ or any other equity ETF would be a new low for the FED..
Unless they see something much worse materializing in the economy, the move by the FED to now purchase individual corporate bonds is a bit puzzling. It had already achieved its objective back in mid-March to lower corporate borrowing rates by buying bond ETFs , back when there was no liquidity and credit markets weren't functioning properly. But my understanding is companies have been able to borrow at almost pre-crisis levels again, so the move seems a bit puzzling. Also, I read that the junk bonds that the FED is purchasing had been investment grade before the crisis, but had been downgraded thereafter..
Let's hope that the market purchases stays on the debt side of things, and doesn't "escalate" to the equity side. Buying the QQQ or any other equity ETF would be a new low for the FED..
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